SHANGHAI, Aug 3 (SMM) - In the second quarter of 2022, affected by the pandemic, the supply of new energy auto parts was insufficient. In Shanghai, the auto companies such as Tesla and SAIC suspended their production, which seriously affected the terminal auto market, resulting in a downward trend in all fields of the new energy industry in the second quarter. Among them, prices of lithium hexafluorophosphate, electrolyte, cobalt sulphate, nickel sulphate and manganese sulphate dropped sharply. According to the SMM data, the average price of lithium hexafluorophosphate in July was only 254,000 yuan/mt, 55% lower than that in March. Lithium hexafluorophosphate prices dropped the most because of the falling raw material costs and the overcapacity. Prices of electrolytes slumped along with the falling prices of lithium hexafluorophosphate and solvent, with the prices of electrolyte (LFP batteries) and electrolyte (ternary batteries) declining by 45% and 34% respectively QoQ.
Besides, the prices of cobalt, nickel and manganese all dropped significantly. According to the SMM data, the average price of cobalt sulphate in July was only 66,000 yuan/mt, which was nearly half of that in March. In the second quarter, the terminal demand was weak, and the power battery inventory fell. In the digital market, the demand for cobalt from ternary precursor and tricobalt tetraoxide decreased significantly, and cobalt prices dropped significantly amid the oversupply. Moreover, the prices of nickel sulphate and manganese sulphate also decreased by 25% and 34% respectively, which was mainly affected by factors such as the weakening demand for precursors and overcapacity in the market.
As for the cathode materials, the average price of #523 ternary materials in July was 330,000 yuan/mt, 10.2% lower than that in March. The price drop in ternary materials was less than that in cobalt, nickel, and manganese. On one hand, the lithium prices were high. On the other hand, the overall lithium carbonate dropped only by 6%, and the cost of lithium carbonate in ternary materials accounts for 68%, while that in cobalt, nickel, and manganese is relatively low. The overall decline of LFP materials in July was lower than that of ternary materials, with the average price standing at 162,000 yuan/mt, a slight decrease of 4% compared with that in March, in which the main materials such as industrial-grade lithium carbonate and iron phosphate declined slightly.
According to the SMM data, the cost of ternary and LFP batteries has decreased with the falling prices of raw materials since April. In July, the cost of ternary batteries dropped to around 1 yuan/Wh, down 12% from March. The cost of LFP batteries also fell to 0.84 yuan/Wh, down 11% MoM, basically the same as the average price of batteries in February. Electrolytes (-34%) and ternary materials (-10.2%) mainly affect the cost of ternary batteries, and electrolytes (-45%) influence the cost of LFP batteries.
In general, the sharp drop in the prices of cobalt and nickel salts from the second quarter has not been fully reflected in the battery companies, and the cost of cobalt and nickel salts in ternary materials only accounts for 30%, hence the prices of cobalt and nickel salts cast a little impact on the costs of ternary batteries. In addition, in the LFP batteries, the electrolyte prices dropped significantly, and the LFP materials fell slightly. The cost drop in the LFP batteries was basically the same as that of the ternary batteries, and the terminal market did not increase the use of ternary batteries because of the decrease in cobalt and nickel prices. In the terminal market, the cost efficiency of LFP batteries is still higher than the terminal batteries, and the use of LFP batteries will continue to rise in the second half of 2022.
At present, the battery cost is basically the same as that in February, and the signing of the bills between battery companies and terminal companies is mostly based on the quarterly price or semi-annual negotiation. Therefore, the decline in the cost of batteries in the second quarter has little impact on the battery prices in the entire power battery market.
What’s more, due to the sharp drop in cobalt salt prices, the market has adjusted the use of ternary materials accordingly, such as increasing the use of #613 material in series-6 and #5512 material in series-5.